Focus put on upkeep of foreclosed homes

City eyes new rules backed by big fines

Problem: Owners of vacant foreclosed homes in Escondido are not maintaining them. The city had an estimated 2,065 homes in default this year; about 800 of those have been foreclosed on.

Proposed regulations: Banks, lenders, and property managers would be responsible for maintenance. Failure to do so might result in fines as high as $1,000 per day. If the city is forced to clean up a house, it might place a lien on the property to recover costs.

Problem: Owners of vacant foreclosed homes in Escondido are not maintaining them. The city had an estimated 2,065 homes in default this year; about 800 of those have been foreclosed on.

Proposed regulations: Banks, lenders, and property managers would be responsible for maintenance. Failure to do so might result in fines as high as $1,000 per day. If the city is forced to clean up a house, it might place a lien on the property to recover costs.

ESCONDIDO

Worried that numerous foreclosures are leaving a trail of neglected vacant properties around Escondido, the City Council has decided to crack down on owners and property managers with heavy fines.

The council introduced an amendment to the municipal code that identifies banks, lenders and property managers as those responsible for the upkeep of foreclosed homes. The current code refers broadly to “property owners” as the responsible party.

The proposed regulations were triggered by a request from Councilman Dick Daniels, who said that neglected foreclosed houses are affecting the city's image.

It is not known how many foreclosed properties have been abandoned in Escondido. But according to Eddie Esteban, a supervisor for Fidelity National Title in Escondido, 2,065 default notices were issued to owners of single-and multi-family houses this year – 4.4 percent of the city's 47,000 households.

Of the homes in default, 798 were foreclosed on between January and August this year, Esteban said. That was a dramatic increase over the 104 foreclosures in 2007.

To put teeth into the amendment, City Attorney Jeff Epp is expected to outline enforcement measures Oct. 22, when the new regulations are scheduled for final adoption by the council.

Epp said he might suggest that the city sue property owners right off the bat to get their attention and impose fines of up to $1,000 a day.

If property owners do nothing to correct the situation, the city might step in and carry out the repairs and cleanup, and recover its costs through a lien on the homes, Epp said.

“We are zeroing in on weeds, broken windows, dilapidated siding,” he said. “We want to affect the value of the property.”

The proposed enforcement measures are much more stringent than current regulations, which impose fines of $100 for the first citation for failure to maintain a property, $500 for the second and $1,000 for the third.

Al Bates, the city's senior code enforcement officer, said he cannot remember the city ever imposing a $1,000 fine for failure to maintain a property.

If the new regulations are adopted, the city would need to monitor hundreds of homes. Escondido, however, is under a hiring freeze due to the economic slowdown and is not be able to expand its code enforcement office.

Community Services Director Jerry Van Leeuwen said he may suggest using the city's fire, police and community services volunteers to fill in the gap.

On the nonregulatory side, a city “foreclosure team” is consulting with real estate agents to find out what else can be done. It will present its recommendations to the council Oct. 22.

One of the team's consultants, Glen Brush, an Escondido real estate broker, said he suggested:

Asking real estate agents to notify the city of problem properties, such as houses with stagnant swimming pools that might become breeding grounds for mosquitoes carrying the West Nile virus, or houses overtaken by weeds.

Providing water for irrigation while the property is in transition.

Asking neighbors to help maintain vacant houses.

Escondido is not the first city in the county to fight negligent banks and lenders.

Chula Vista passed an ordinance last year that holds lenders responsible for the upkeep of foreclosed homes, including hiring management firms.

Failure to comply could result in fines of up to $500 a day. If the penalties are not paid, the city could place a lien on the property, Chula Vista spokeswoman Liz Pursell said.

She said the Chula Vista program generated so much interest that the city's code enforcement manager testified on Capitol Hill and fielded inquiries from cities all over the country.